Microsoft has announced Office Live Workspace (OLW), which is something like a SaaS version of SharePoint Light, only perhaps lighter than one might expect.Office currently is taking a beating in the feisty SaaS sector, where Zoho,Google Apps and others are currently vying for marketshare. Even Adobe is getting into the game, having recently announced it would be acquiring the parent company of Buzzword, which provides Office-esque capabilities seamlessly between the Web and (eww!) non-Web worlds.Clearly Microsoft has acknowledged these threats. In this regard, we might expect them to marry their ubiquitous Office suite to an online solution. Logical enough, right? We're sure our suspicions are justfied - but in the meantime, Office Live Workspace is not the avenging angel we thought it would be.Instead of replacement, think companion.The Office Live Workspace aims to replicate a portion of SharePoint's collaboration and storage facilities, in a Web-based portal. The quick and dirty summary is that it gives Microsoft Live users a free (watch that word) place to store, share and collaborate on documents. The kick-off storage limit is reported at a measly 250 MB -- which MS claims is good enough to "store 1000+ Microsoft Office documents in one place." Yeah, right. We're expecting some pretty early frustration. 2 GB isn't even good enough for email these days. We have to ask: What are they thinking?Aside from skimping on storage, the new offer does have some potential. Office champs will be able to upload, download, view, edit (offline) and comment on (online) documents. Here's what you can't do: You can't create new documents, or edit existing ones directly. You can't build a wiki or a blog. You can't create custom lists. You can't run online discussions or presentations. Remember, the service is a companion to Microsoft's software. To participate, you'll still need MS Office installed locally.With this in mind, there are a few other Office integration points. You'll be able to tie in with Outlook by synchronizing contacts, tasks and event lists. This is not ground-breaking by any means, but it could still prove useful to some.From our seat, this comes off like a classic case of defending marketshare -- a.k.a. a stop-gap -- rather than taking the offensive tack. And really, this doesn't address the Google Apps/Zoho/Adobe threats at all; it only assumes that an enterprise-based Word or Excel user really just dislikes the idea of transferring documents back and forth via email or other storage media -- to quote the OLW website, "No more flash drives." That's right. And in fact, there's not a lot of flash in general.Office Live Workspace will support Office 2003 and 2007 desktop software. And plans are for beta to rev-up before the end of the calendar year. Eager beavers can pre-register for the beta.